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Digital Signage 2008
By John Latta, WAVE 0810 8/1/08

Chicago, IL
May 28, 2008

This was the first conference by DisplaySearch to explore the Digital Signage market.

Large Format FPDs for Digital Signage

Chris Connery of DisplaySearch give the opening talk about the market.

     DisplaySearch defines the Digital Signage market as:

          The use of digital displays in out-of-home environments, whether they be for Information
          Display, Advertising or some other type of time sensitive way to communicate information quickly
          and easily to the general public.

     There are three classes of Digital Signage:

          POD – Point of Decision
          POP – Point of Purchase
          GA – General Awareness

     The potential next step for digital signage is from out-of-home (OOH) to Outdoors. This tends to favor LED type displays.

     The flattening of growth in large area displays, due to home saturation of televisions, is a key reason the FPD industry is seeking growth in digital signage.

     There are many sub-markets in Digital Signage:

          Retail Banking
          Retail Advertising
          Education
          Electronic Menu Boards
          Command and Control Centers
          Retail POS
          Tradeshows and Staging
          Public Transportation

     Digital Signage is far more than just the display. It includes many components of which there is:

          PCs
          Media Players
          Mounts
          Audio
          Content Management software
          Cabling
          Wireless
          Audio/Video Distribution
          Amplifiers
          RS-232 Controllers
          Financial services
          Network Management
          Content Creation
          Technical support
          Security

     This is described as the professional blending of AV & IT.

     The FPD digital signage market is estimated to be 180k units of PDP and 125k units of LCD in Q1 2008.

     It is expected that the market will reach 3.7m units by 2011.

     It is projected digital signage will replace the traditional light box advertising outlets.

     This latter opportunity is the replacement of printed signs by digital signs. Significant companies already have a role in this market and include:

          Clear Channel Outdoor
          CBS Outdoor
          Lamar Advertising
          Van Wagner Communications
          JCDecaux
          Titan Worldwide

     The marriage of these four worlds is asking the following to work together:

          FPD
          ProAV
          IT
          Advertising

     It is claimed that digital signage is not a commodity market but a complicated one.

Out-of-Home Video Advertising Bureau Perspective

Suzanne Alecia, President of the OVAB, Out of Home Advertising Bureau, give a view of the digital signage market.

     Digital signage is a disruptive opportunity. The reasons include:

          Traditional media is declining;

          The writers’ strike impacted network audiences by 30%;

          DVR continue to impact traditional business models;

          Time and place shifted media consumption continues to rise.

     The OVAB was launched in 2007 to support standards, best practices and research.

     An OOH video ad network is

          Any organization that operates out-of-home video/digital network that includes
          programming/content and advertising.

     The current membership includes 23 networks, 34,500 venues and 400,00+ screens. The gross venue traffic is estimated at 2.4B/month.

     The four major sectors of this industry are: Retail, service locations, hospitality & entertainment and
     malls.

     It is estimated that the traditional outdoor industry is $7.1B/year with aa 8/3% annual growth rate. Video networks and screens is a $1B market with a CAGR of 25.4%.

     The key challenges the industry faces are:

          Lack of adequate audience information;

          Digital signage networks are not being planned as part of the overall marketing communications mix.

          Advertising buys tend to be opportunistic and not a part of the normal mix;

          Advertising agencies have not adapted to this new medium.

How to Increase the Digital Signage Value Proposition

Neal Bangerter, Reactrix Systems, provide a view of the opportunity for digital signage.

     It is claimed that the out-of-home advertising market is the fastest growing media market – at 44%

     Advertisers are looking for options to replace traditional media. The availability of commercial
     displays make it possible for to develop the OOH display environment.

     A rich ecosystem is emerging which has:

          Content creation tools
          Media and network management software
          Player hardware and software
          Integrators to build systems.

     In order to drive the tipping points of the value proposition digital signage needs to reduce costs and
     significantly increase the value of a given OOH digital sign location.

     The cost of going digital has a problem. These include:

           The systems are complex, expensive and many difference groups are involved. The ROI is
           poorly understood.

     Given that the integration costs are high, the actual hardware is a small fraction of the overall system
     deployment costs.

     It is important to consider how to increase the value of the sign. Factors to consider include.

          Engagement including interactivity.

          Measurement of the audience participation and impact.

          Increase the ability to precisely target the intended audience.

Scaling-Up to Digital Signage

Eyal Rom, C-nario Visual Solutions, examined the digital signage opportunity.

     The 4th screen is defined using the other screens.

          1st Screen – home television
          2nd Screen – Internet
          3rd Screen – Mobile devices
          4th Screen – OOH in almost every public and
          corporate venue.

     Digital signage is more than the display. It includes:

          Media players
          Audio & Video distribution
          Content
          Networking
          Network Management
          Show control and
          Security

     The digital signage ecosystem includes:

          Content Providers
          Network Operators
          Project Design
          Software Developers
          Bandwidth Providers and
          Display manufacturers

     As the market and deployed systems grow it is critical to support scalability and network monitoring. Some of the attributes include.

          Monitoring tools.
          Snapshots of the actual visuals
          Device control and management, even to the final nots.

     Interactivity represents the next generation of digital signage. Two objectives were cited.

          Integrate infomercials and relevant information for the waiting audience.

          Provide local managers the ability to update the network with locat information.

     Scalability is needed in all aspects of the ecosystem and market.

          Larger networks
          New applications
          New functionalities
          Interface all the organizational departments, and
          Integration between the 2nd, 3rd and 4th screen.

Displays for Digital Signage

Don Fasick, LG Electronics, spoke about the display requirements.

     The primary applications for digital signage are:

          Transportation
          Education
          POS Signage
          Outdoor venues
          Conference rooms and
          Control rooms.

     The requirements of the panel include many factors:

          Display environment;
          Image quality
          Interfaces including touch
          Form factor
          B/L improvements
          Reliability
          Display usage
          Mechanical design and
          Ecologically friendly.

     LCD public displays are designed for these environments. Consumer products are being used but
     they are not suited for the work environment of display signage.

     3D is an emerging category of displays.

WAVE Comments

There is a well established paper based and electronic OOH display market largely based around advertising. The video portion is complex with many suppliers and participants. Digital signage is considered by many to be disruptive to the existing market. It integrates ProAV; IT; and Advertising. Many are bullish in the opportunity but this has yet to be validated in the market. This is the so called 4th screen opportunity.

At Digital Signage a number of references were made to the potential of interactivity. Yet, no details were provided. At best, we can infer this can bring a new dimension to the digital signage experience but it further segments the market. Given the disruption that digital brings, i.e., digital signage, adding another new layer only makes the market, ecosystem and end user environment more complex to an already complex system. Thus, we should only expect interactivity to support vertical markets with well developed needs for interactivity.

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Page updated 9/26/08
Copyright 4th Wave Inc, 2008